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The Science of Getting Rich: CHAPTER VII [excerpt] by Wallace D. Wattles #Gratitude

--- Gratitude THE ILLUSTRATIONS GIVEN IN THE LAST CHAPTER will have conveyed to the reader the fact that the first step toward getting ...

Saturday, July 31, 2010

GDP Slows: Recovery Loses Steam As Consumers Turn Cautious

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I've borrowed a few paragraphs from an AP story here so that I might express my own views about the content of such..
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--- In the AP story 'Economic recovery losing steam'
"Even the good news for the economy this spring came with an asterisk. Home builders, for example, increased their spending at the fastest pace in 27 years. But economists say that was likely a one-time event propelled by a now-expired tax credit for homebuyers."
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Home builders increased spending at the fastest pace in 27 years?! In the middle of the worst recession since the great depression?! 27 years ago was 1983... Our country was a much different place, in my opinion, in 1983.. I was there.. That makes no sense at all and is obviously, to me anyway, a result of government & Federal Reserve interference in the economy during a recession and, at least in part, for political reasons in an election year.. Outrageous.. in my opinion
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"Companies also invested in equipment and software this spring at the fastest pace in 13 years. (And 13 years ago was about 1997, nearing the peak of the dot com bubble. Again, in the middle of the worst recession since the great depression?! I defy you to explain to me how that makes sense) And they are expected to keep up that spending. ('Expected by WHOM?! Is my question) But even that won't be enough to invigorate the rebound. And some spending on equipment that increases productivity actually makes it easier for companies to do without more workers."
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These, to me, are but two examples of how the oligarcy (government plus corporations) plus the actions of the Federal Reserve are colluding to 'hide' the disastrous condition of the 'real' economy from the American people. They seek to do this by dramatically inflating government spending. They can 'afford' to engage in this 'stimulative' economic manipulation because they control all the money! Deficit spending be damned..

And speaking of economic manipulation, check out this paragraph..
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"With the fall elections looming, Republicans in Congress and some Democrats have shown little inclination to pass additional stimulus measures that would add to the deficit in order to speed up the recovery."
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Talk about politics overwhelming fiscal responsibility.. Politicians KNOW that Americans are right to be angry about deficit spending and don't dare increase it in an election season.

So, in steps the Federal Reserve bank. An entity with accountability to NO ONE!
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"The Federal Reserve is exploring new steps to bolster the recovery in case the economy flashes danger signs of sliding back into recession or of a dangerous bout of deflation."
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Bolster the recovery as a way to help protect Washington insiders strangle hold on politics in America. As a way to make sure 'banking friendly' politicians retain the power to help financial elites prop up their failed economic system.

How will the Federal Reserve accomplish this?
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"Policymakers could cut the interest rate paid to banks on money parked at the Fed to zero. They could also promise to keep rates at record lows for longer, or revive programs to buy mortgage securities or government debt."
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Cut interest rates on bank reserves to zero to do what exactly? Make the Federal Reserves balance sheet look a little better?

Keep rates at record lows? As they have been since the dot com bust and 9/11? Isn't that a big part of how we GOT here?

Buy mortgage securities? You mean the 'toxic assets' that you already own too many of?

Buy government debt? You mean the flashy ability to create money from thin air and then LOAN it to the government while expecting the American people to pick up the tab?

I say the United States of America is in default on it's debt already if not for the Federal Reserves amazing, logic defying, ability to endlessly print money.

Folks, the economy is a train wreck. And still our government, our elected 'representatives', with the collusion and support of a panicked Federal Reserve, continue to do everything in their power to obfuscate economic reality. To 'hide' from the American people the severity of our collective economic misery.

In my opinion, what has caused most all of the calamity we now face is the refusal of 'the powers that be' to accept responsibility for this debt ridden economy and society. The same debt ridden economy and society that their collective policies created in the first place.

For they fear the pain of a greatest depression. As they should I suppose.

One more 'little thing' that has been 'bugging' me for this post..

'Price stability' You can go read about it on THE FEDERAL RESERVE BANK of MINNEAPOLIS if you like..

But to *me* it just seems that the Federal Reserve has a policy, "Price Stability", to see to it that prices only and always rise, inflation. Which undermines constantly the value of our own currency. Rather than face the boogie man of deflation..

Greg

Thursday, July 29, 2010

Car sales top list of #consumer complaints

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Click here for the original post on www.marketwatch.com
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July 28, 2010, 12:01 a.m. EDT
Car sales top list of consumer complaints
Foreclosure scams are fastest-growing gripe, new survey finds

By Jennifer Waters, MarketWatch

CHICAGO (MarketWatch) -- In a sign of the economic times, consumers' biggest gripes were about car sales and credit and debt grievances, according to a survey of complaints made to consumer agencies last year. The fastest-growing gripe was about bogus offers to save consumers from foreclosure.

Complaints to state and local consumer agencies rose in 2009 at the same time that those agencies saw their staffing levels and resources fall, according to the latest survey conducted by the Consumer Federation of America, the National Association of Consumer Agency Administrators and the North American Consumer Protection Investigators.
Smart phones now control your TV, but should they?

Two new infrared sensors can now turn your smart phone into a remote control for your television. But WSJ's Katherine Boehret says the technology has some practicality issues.

"It's clear from the nation's economic woes that consumers and consumer agencies were hit hard last year," Susan Grant, CFA's consumer protection director, said on a conference call Tuesday.

The groups polled 33 city, county and state agencies in 18 states over a one-year period that ended in December. More than 300,000 complaints were logged and the agencies cumulatively retrieved nearly $110 million in restitution and savings for consumers.

More than half the agencies said they received more complaints in 2009 than in 2008.

Those numbers, however, do not include the calls, letters and emails those agencies receive from consumers looking for advice on how to resolve issues on their own. The Tennessee Division of Consumer Affairs, for example, booked six times more contacts -- 35,000 -- than actual complaints.

The 2009 results mirror the dire economic straits many consumers faced. Credit and debt issues and phony foreclosure-aid offers moved into the No. 2 position from third place last year as more consumers faced troubles with mortgage-related fraud, debt-relief services, predatory lending and illegal or abusive debt-collection tactics.

In Georgia, the governor's office of consumer affairs charged Dwayne Green, chief executive of Maximus Investment Group, with racketeering and theft after 34 residents alleged that he promised to keep their homes out of foreclosure for fees ranging from $250 to $500, but then did nothing for the homeowners, according to the report. Thirty-three of the homes went into foreclosure.

"Consumers are desperately trying to fend off foreclosure and in many of these offers to help them, [scammers] take their money -- and in some cases, their homes -- and run," Grant said.

The top 10 consumer complaints for 2009 were:

1. Auto

Consumers complained about misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, and towing and leasing disputes.

2. Credit and debt

Complaints of mortgage-related fraud rose, as did complaints of billing and fee disputes, credit-repair and debt-relief services, predatory lending and illegal or abusive debt-collection tactics.

3. Home improvement and construction

This was the second-biggest source of complaints in 2008 but problems decreased as new-home construction and overall home sales dipped. Consumers are still complaining, however, about shoddy work and failure to start or complete a job.

4. Utilities

Phone, cable, satellite, Internet, electric and gas services were all cited for service problems or billing disputes.

5. Retail sales

Much like auto sales, consumers objected to false advertising and other deceptive practices as well as defective merchandise, problems with rebates, coupons, gift cards and certificates, and failures in delivering products.

6. Services

Consumers said companies and individuals misrepresented themselves, did shoddy work or failed to perform at all, and did not have required licenses.

7. Internet sales

Consumers said they encountered misrepresentations or other deceptive practices. They also cited the problem of never receiving delivery of online purchases.

8. Household goods

Companies misrepresented their products, didn't deliver them or made faulty repairs on furniture or appliances, consumers said.

9. Landlord/tenant disputes; complaints about home solicitations

There was a tie for the number of complaints in each of these categories. Tenants reported unhealthy or unsafe conditions, and said that landlords didn't make repairs or keep their promises. Deposit and rent disputes were big, as were illegal eviction tactics.

For home solicitations, consumers were unhappy about misrepresentations or failure-to-deliver problems resulting from door-to-door, telemarketing or mail solicitations. Consumers also reported many do-not-call violations.

10. Health products and services

Consumers griped about misleading claims, unlicensed practitioners or delivery failures.

Jennifer Waters is a MarketWatch reporter, based in Chicago.

Dumbing Down Society

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I found this article especially interesting because it 'fits' with one of my 'conspiracy theories'...

You see I have this sneaking suspicion that the oligarchy WANTS Americans to be as 'unhealthy' as possible solely because that is what pumps money into the health care system the fastest... poor health...

And what better way to make sure a 'sufficient number' of Americans are unhealthy than to fill their food and drinks and drugs with chemicals which make them unhealthy???

You see one of *my* conspiracies is that the health care industry is the LARGEST bubble of them all... Easily larger than the financial bubble..

Could it be, perhaps, just another of the experiments by the elites that seems to have gotten out of hand?

So check this article out and see what you think...
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Dumbing Down Society Part I: Foods, Beverages and Meds

Greg

Tuesday, July 27, 2010

Thomas Jefferson on #Banks / #FED

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If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

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TJ is my hero ;)

Greg

Friday, July 23, 2010

Some TRUTH & History about #Usury

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The excerpt below was taken from the book 'The Secrets of the Temple' by William Greider. It is used here without permission as I don't really give a rats a$$ about all that legal mumbo-jumbo.. My hope is that it will help someone with a bit of knowledge of history..

I painstakingly copied a bit more of this book than I intended.. I did so because I thought it important to get it on the blog as it is very insightful. It makes it very obvious that the United states congress and the Federal Reserve did what they did in 1980 with their eyes wide open, with full knowledge of the risks involved.

Basically our congress caved to pressure from the banking system to pass financial deregulation and that financial deregulation included the elimination of the sin of usury by an act of congress..

I suggest that we are suffering more from that one single choice now than from any other thing our government and the FED have done in our history.. living in sin is never an easy thing to do..

In my opinion, the elimination of usury laws at the state level are at the very root of ALL of the financial problems we are faced with today. For many younger Americans money holds no value whatsoever.. And why should it? It is merely paper backed by a wink and a nod from Uncle Sam.. nothing more than that. Your money is worthless, it has no value other than the value you yourself ascribe to it.
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For some years, American society had been engaged in an era of moral liberation, a period when long standing religious commandments and inherited social taboos fell before the new popular desires. Protestant disapproval of gambling was displaced by multimillion-dollar public lotteries, sponsored by state and local governments. The Catholic sin of abortion was legalized. Pornography, once forbidden and furtive, became freely available. Homosexuality and even prostitution were reconsidered in a more tolerant light. Moral inhibitions that had held authority for centuries were abandoned. Old notions of sinfulness were redefined as largely private matters, no longer subject to public regulation.

In this climate of moral change, American finance was also liberated to do what had once been forbidden. The sin of usury was legalized, by act of congress. Religious injunctions against usury were as old as the book of Genesis and given special definition in American law: lending at interest rates above certain limits was ruinous to the hapless borrower and therefor prohibited. When it enacted financial deregulation, congress declared that, given the circumstances of double-digit inflation, the usury laws must be set aside. The interest-rate ceilings imposed by state governments on home mortgages were abolished by federal legislation, and the limits on business and agriculture lending wer suspended for three years. Many state legislatures, responding to the same pressures, repealed their own usury limits on consumer loans.

Unlike the eclipse of other moral taboos, usury provoked no great controversy when it was decriminalized. The new leniency toward private sexual behavior inspired storms of popular reaction and political movements, but usury provoked little or no reaction. Lending money at ruinous interest rates would now be regarded,m like sex, as a "victimless crime," a private act between consenting adults.

The suspension of the usury laws, though less important than the other provisions, accurately reflected the the moral logic that propelled the deregulation package. A deep transformation was under way in the political values shared by American elites, both Democratic and Republican, and it cut across many areas beyond finance. The values inherited from the New Deal--the idea that government would serve as regulator and protector in the raw struggles among private economic interests--were in eclipse. The commitments of liberalism--providing shelter for weaker combatants in the marketplace to insure certain social goals--were being displaced. An older faith was reviving and regaining it's original hegemony, the belief that social justice was best served by an unfettered free market.

The biblical meaning of usury defined the obligations of those who had accumulated wealth toward others who had none and were in need. It imposed limits on the power that the wealthy could exercise, throught lending, over the poor. By 1980, the moral argument was reversed. Creditors were now portrayed in political debate as the victims, the virtuous citizens who were exploited by the political interference. Borrowers were described as morally suspect--people who did not themselves save, whose "speculative" spending was "subsidized" by the virtuous savers. The original social contract implied by the by the concept of usury--the obligations of wealth toward the needs of others--was inverted. The congressional debate described a new political obligation: the savers must be set free, free to seek the highest rate of return on their money.

Congress, of course, did not debate the moral meaning of usury, but was reacting to the practical consequences of usury laws. As inflation pushed market interest rates higher, the usury ceilings effectively shut down lending in state after state. No one would lend at the old levels, and local commerce was starved for credit. Citizens still believed in the concept, however. In Arkansas, voters twice refused to repeal the usury limit of 10% in the state constitution, despite the fact that home mortgages and auto loans were no longer available in the state. Their resistance ultimately was futile. No single state could opt out of the national financial system without paying the unbearable price of economic stagnation.

The moral concept of usury was always in fundamental conflict with the dynamics of capitalism. Usury implied social obligation; capitalism depended on individual gain. When they collided in Western history, the capitalist imperative prevailed. Until the late middle ages, the Catholic Church still taught that lending at interest--any interest rate whatever--was a sin against God, "ignominious," as the Second Lateran Council of 1139 described it. Usurers, though they might be wealthy merchants and prominent in Church affairs, were excommunicated and refused burial in Christian ground, condemned with robbers prostitutes and heretics. Their external damnation was described in the most grizzly term: toads and other demons gathered on the usurers corpse, plucking silver from his purse and driving the coins into the hear and mouth of the cadaver. The moral offense was profit without work. The usurer sold time, which belonged only to God.

Christian theology eventually yielded to the new reality. By the thirteenth century, the primitive networks of capitalism--specialized production that yielded surplus goods for trade--were flourishing across Europe. To function, even in it's simplest forms, capitalism required the linkage across time that credit provided--lending today for transactions that would be completed in the future. The merchant princes who led the great transformation were cast as sinners, and yet their enterprise was demonstrably generating new levels of abundance, multiplying income and wealth beyond the ancient, precarious struggle for subsistence. A theological innovation opened the way for absolution of their sins--the elaboration of purgatory. After death, the souls of condemned usurers might yet be resurrected for eternity through the intervention of prayer and other considerations. Many primitive capitalists plunged forward into sinfulness, counting on purgatory for their eventual salvation. "The birth of purgatory," the French historian Jacques Le Goff wrote, "is also the dawn of banking."

By the sixteenth century, the practice of usury was quite common despite the Church's lingering disapproval. Emmanuel Le Roy Ladurie, another French historian, described the account books of an enterprising farmer-usurer in southern France around 1540:

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A typical capitalist at the stage of "primitive accumulation," Masenx reinvested his profits and made money on everything he turned his hand to. In the first place, he made loans of grain or money at short term and high interest for a month or for a week at a time, and he also practiced the cruelest form of usury, "from day to day at his pleasure." He lent his bordiers (who did not even have sowing seed) the money to marry off a daughter or sister, and he also furnished, on credit, the silver, the old wine, and the leg of mutton for the wedding feast. He lent money on land, and in time the fields of his debt-ridden clients would help round out Masenx's own properties."
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Moral contempt for bankers and their power over others would endure across the centuries and into the present time, but the process of capital accumulation established it's own justification. The morality was exalted in the Protestant ethic of John Calvin; the mechanics were elaborated by the classical economists who accompanied the rise of industrial capitalism. Bankers were assured that by doing what had once been forbidden they were actually doing good for all.

The payment of interest was the core of the capitalist dynamic--it mobilized idle wealth for productive enterprises. Interest lured savings into new risk, new ventures that would multiple the economic rewards. Investment was the opposite of hoarding, the miser counting gold in his storehouse and oblivious to the needs of others. Investment promised to return to the wealth holder, but it also created new work for others and more goods for general consumption. If successful, the new venture would produce it's own surplus of wealth, which, in turn, was fed back into the process of growth and accumulation. Even allowing for failures and the natural depreciation of things wearing out, this recycling process multiplied wealth, compounding the original value. Interest-paying investment linked the past to the future and bankers were the intermediaries.

Eventually the concept of usury was refined to a more practical standard: A political prohibition against ruinous interest rates. Capital deserved a just return, but it was not free to collect a toll that would guarantee failure for the borrowers. Above a certain level, interest actually depressed the capitalist process and produced stagnation and further concentration of wealth as debtors failed and forfeited their property to the usurious lender.

John Maynard Keynes himself wrestled with the moral contradictions. Keynes deplored high interest rates and the inequitable distribution of wealth and incomes, but he nevertheless celebrated the creative possibilities of capital multiplication. "The power of compound interest over 200 years," Keynes wrote, "is such as to stagger the imagination." In 1930, at the depths of global depression, Keynes wrote a prophetic essay entitled "Economic Possibilities for Our Grandchildren," which predicted a golden future for mankind, thanks to the labor-saving inventions of science and the driving force of compound interest. Amid the gathering despair, Keynes was able to see that the capitalist economies were on the brink of vast break-throughs in agriculture and other technologies--advances that would dramatically multiply the productive potential.

"All this means in the long run that mankind is solving its economic problem," Keynes wrote then. "I would predict that the standard of life in progressive counties 100 years hence will be between four and eight times as high as it is today." Ultimately, mankind would be freed of the morbid love of money to confront the deeper questions of human existence--"how to live wisely and agreeably and well."

The wealth holders would eventually lose their pwoer over others, Keynes predicted in the conclusion of his most famous work, "The General Theory of Employment, Interest and Money". Economies operating efficiently at full employment would, in time, produce such an abundant supply of capital that the price for it would fall to very low levels--, very low interest rates. This surplus Keynes believed,

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would mean the euthanasia of the rentier and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, anymore than does the rent of land. The owner of capital can obtain interest because capital is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. ... I see, therefore, the rentier aspect of capitalism as a transition which will disappear when it has done its work.
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In the meantime, he cautioned, human society must be patient with the flaws of capitalism. Until the abundance of capital was secured, practical necessity required one to tolerate the inequities of wealth and the exploitation of usurers. "For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not," Keynes explained. "Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."

Fifty years later, the Keynesian vision was not fulfilled, of course. The rentier was alive and well, and his demands, as expressed in interest rates, were many times greater than prices that had disturbed Keynes in his day. Yet Keynes was not entirely wrong either. Despite wars and other calamities, the capitalist dynamic had achieved many of the wealth-producing breakthroughs he had envisioned and others he did not foresee. The general "standard of life" was improved dramatically, at least in the industrial world, though the benefits were still distributed quite unevenly. The disparities of wealth and income--and the attendant "gods" of avarice and usury--were now most dramatic on the global scale, among nations rich and poor.

An alternative vision of interest and capital existed in the developing world, springing from the same religious principles. While Americans accepted high interest rates as necessary to commerce, and their elected representatives set aside the legal prohibitions against usury, people in the Islamic world still believed usury was sinful--in the original sense of the word. The Koran, like the Bible, taught that lending at interest was immoral and for the same reasons. In the Moslem nations of the Middle East, however, the original moral meaning of usury survived as an important article of faith, at least among the fundamentalists. Interest incomes from loans was forbidden. The Islamic societies, notwithstanding the great wealth produced by oil and the accompanying modernization, have never passed through the stages of capitalist development that changed the thinking of Western Christianity. The banking system that existed in the Middle East was largely superimposed by European colonialism, but its values were never accepted by the Moslem faithful.

Starting in the early 1970's, Middle East economists and political leaders began to devise an Islamic alternative to Western banking--a banking system that would serve as intermediary between depositors and borrowers and would raise capital for new ventures, but would not pay or charge interest. Instead, the investor would share equitably in the risk of the enterprise, profiting or losing as a partner with the entrepreneur. Thus, the relationship between creditor and debtor was more equal, more like a limited partnership in Western commerce. The investor is promised a fixed percentage of future profits, but he is not guaranteed that he will receive income or even the full return of his original principle.

A decade later, some thirty Islamic financial institutions were in operation in Egypt, Sudan and the oil rich Persian Gulf states. Religious advisers were consulted by the bankers designing new financial instruments to make sure the credit transactions did not somehow conceal the forbidden riba, the payment of interest. The total assets of the Islamic banks were relatively small, depending on deposits from the general public, not the estimated surplus of $100 billion from oil income, but the idea was popular.

A study by the Western industrial nations' Organization for Economic Cooperation and Development explained:

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Islamic concepts are different from capitalism by their opposition to excessive accumulation of wealth and, in contradiction to socialism, by their protection of the rights to property, including ownership of the means of production... A true Islamic society must not be an arena where opposing interests clash, but rather a place where harmonious relations can be achieved through a sense of shared responsibilities. The individual's rights must be equitably balanced against those of society at large.
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As in Christendom, of course, the rich did not always live by the articles of their faith. Moreover, the Arab investors were guided in financial affairs by the same moral distinction that once governed Christians and Jews. Riba was forbidden among members of the tribe, but it was perfectly acceptable to collect interest from foreigners. Thus, for instance, pious citizens of Saudi Arabia would see no hypocrisy in the fact that more than $50 billion of their nations oil revenues was invested at one time in U.S. government securities, collecting interest from the borrower, the American taxpayer, while simultaneously the Saudi princes promoted the concept of interest-free Islamic banking at home.

Meanwhile, Americans did not doubt the superiority of of their own system or question its justice. After all, the arguments for repealing the legal limits on interest were based on equity too. After congress set aside the state usury laws, investors would at last be free to recover a fair return on their wealth. In the United States, the concept of usury seemed an anachronism.

When usury became legal, of course some lenders would demand more than a fair return. In Washington, D.C., Pearl S. Merriwether was desperate for a loan. Disabled and out of work at 62, she was unable to pay her gas and telephone bills and so she turned to First American Mortgage Company. First American provided her a one year $25,000 mortgage with an effective interest rate of 142 percent. This was now legal. First American reported that over a two year period it lent more than $2 million at interest rates ranging from 100 to 150 percent.

As state legislatures followed congress by repealing usury limits on consumer loans, ther desperate or ill-informed borrowers would pay more too. In Flagstaff, Arizona, a Navajo family named Keams borrowed $700 from Ideasource Inc. at 127 percent interest. In Richmond, Virgina, an elderly couple, Charles and Gertrude Taylor, borrowing $5,325, was charged 39 points, or $2,100, in order to make the transaction. In South Carolina car dealers charged upto 150 percent interest. Some of these victims, either gullible or desperate, lost their homes to the lenders--much the way French peasants lost their small plots of land to the avaricious rentier in the 16th century.

These abuses and many others were lamented, but hardly to be avoided in a free marketplace. Like the other changes in public morality, legal liberation from the sin of usury meant, inevitably, that some lenders would try it.

When the financial legislation was finally enacted, the Federal Reserve had won an important victory for itself. Yet, on a deeper level, the Fed had also lost. For more than 15 years, the Federal Reserve had staged an awkward stalling action against financial deregulation--a position that put it athwart the ambitions of its own primary constituency, the commercial banks. The 1980 legislation meant its rear-guard struggle was lost. The Federal Reserve chairman, whatever he might say in public, knew the legislation would greatly complicate the most important function of the central bank--controlling the expansion of credit.

"Under interest-rate decontrol," a former Fed official explained, "any idiot can borrow money, as long as he is willing to pay the price. So you have to push interest rates up very high across the board in order to slow down the economy. So the Fed's control becomes blunter, more difficult."

For a generation, the various ceiling the government had imposed on interest rates had acted like stop valves in the plumbing of finance. When market forces (or the Fed) pushed interest rates up to the legal limits, the system would shut down. it was not that borrowers such as home buyers or contractors were necessarily unwilling to pay higher interest rates--the shutdown came from investors, who refused to provide the money when they knew their returns were artificially depressed by the government ceilings. An investor who held funds in a regulated account at a savings and loan, drawing 5 percent or so, would withdraw his money and move it to another storage place, one that was unregulated and promised a much higher return.

The results could be dramatic. When the Federal Reserve tightened the money supply and pushed up interest rates, thousands and thousands withdrew their funds and the stop valves closed. Money rushed out of financial intermediaries like savings and loan associations, at which point S & L's were unable to make new mortgage loans. When mortgage lending stopped, the housing industry shut down. The declining sales and employment in housing would spread to other sectors, and the Federal Reserve would get the results it wanted--a subsidence of economic activity that moderated price inflation.

These episodes were known as "credit crunches," and a series of them occurred periodically in the late 1960s and early 1970s (known as "disintermediation" to economists, because the process of financial intermediation, the flow of money from investor through lending institution to borrower, was interrupted). The effects could be brutally swift and particularly harsh for the housing industry. Each time a credit crunch developed, the Federal Reserve was denounced by home builders, S & L managers and others for inducing it. The Fed was "choking" their access to credit, they complained, and essentially they were right.

But the credit crunch had two virtues, from the Federal Reserve's point of view. First, it worked (sometimes more severely than the Fed had intended). Second, it worked at relatively low levels of interest rates. If the Fed pushed rates up a notch or two, the flows of lending into certain sectors would begin to stop. Now that the last of Reg Q interest-rate controls were removed, the supply of funds would continue uninterrupted, but at what price? How high would the Fed have to push interest rates in order to get the required response from the economy?

"Before we zapped the housing industry," the former Fed official said. "Now we have to zap the whole economy. That makes Volcker's life a lot more difficult."

The standard economic models assumed that consumers, businesses and bankers would all react predictably to the negative incentives of higher interest rates. Dense mathmatical foruleas were devoted to describing how x interest-rate would produce x restraint among borrowers and buyers--the behavior-modification model of monetary policy. The trouble was, people did not modify their behavior according to the model.

Encouraged by expectations of inflation or driven by their own reckless optimism, borrowers were shattering the old assumptions about how much they would pay for money. People kept borrowing even despite the record rates--most dramatically during the early months of 1980 when the prime rate rose toward 20 percent and credit continued to expand explosively. Higher rates had bite, but not nearly as strong as the economists would have predicted. Household consumers were the most cautious, according to Albert Wojnilower's analysis of the trend. Families were the first to pull back from borrowing at higher rates because they were risking their own well-being. Business executives, a naturally optimistic group, were less prudent than households. Financial managers, in Wojnilower's judgment, were the most incautious of all--willing to continue lending at prices that some borrowers could not possibly pay. If enough borrowers eventually defaulted, then the generous bankers were in trouble too.

Wojnilower described the threat to monetary control:

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... no amount of deregulation and innovation can enable a financial system to escape the bear hug of a determinedly anti-inflationary monetary policy. But, if key participants believe that as a result of their ingenuity they as individuals can escape, they make it much harder for a restrictive monetary policy to succeed. They become willing to take greater risks and to bid up interest rates even higher in an effort to outlast each other and the competition. Every rise in interest rates makes it more politically difficult for the government to press home its restrictive policy. And the greater exposure taken by the private sector, the more the Fed's hand may be stayed for fear of touching off an uncontrollable wave of bankruptcies.
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The Federal Reserve could not simply let the foolhardy take their lumps, since it was also responsible for "the safety and soundness" of the financial system. If financial institutions, particularly banks, were undermined by their own carefree lending, the Fed would have to pick up the pieces. As lender of last resort, it was supposed to rescue the drowning swimmers, as Wojnilower put it. ""Deregulation," he warned, "is like removing the ropes and depth markers and buoys and putting all the responsibility for safety on the lifeguard. It is a game of chicken with the financial survival of our economy."

In less colorful terms, many of the senior Federal Reserve officials shared some of Wojnilower's concern,including Paul Volcker. Their apprehension was never forcefully stated in public. financial deregulation, after all, was an issue akin to motherhood in the financial community and all Fed officials blessed the general objective. Occasionally, however, Volcker would hint at his misgivings.

"We have devoted a lot of effort, rightly or wrongly, over the last fifteen years...to freeing up the markets from the kind of restraint we once had," Volcker told the House Banking Committee. "...We are more reliant, in a sense, on interest rates as that cost factor exerting restraint. We don't have the available restraint that we once had and most people count that as a blessing." Did Volcker regard it as a blessing? "oh, by and large," he answered. "I think that we needed some freeing up here. I get restive about it now and then because it comes out partially in interest rates higher than they otherwise would be."

Over the years, the deregulation question had put Volcker and his predecessors in an awkward position politically. A forthright defense of the regulatory stop valves would have been most difficult, considering that they were under attack from all sides--the disappointed borrowers, the investors and the financial intermediaries that lost their deposits. Instead, the Fed stalled. It endorsed the idea of deregulation, but urged caution in actually doing it. It held the line on the various Reg Q ceilings as long as possible, then one by one discarded them when the pressures for change became too great.

If the Fed was in the back pocket of the major banks, then why did it resist them on financial deregulation? In many ways, the Federal Reserve did resemble the political scientist's definition of a "captive" regulatory agency--one that was beholden to the industry that it regulated, anxious to serve its needs first. Yet here was an issue of great importance to the Fed's core constituency of major banks--financial deregulation--and the central bank pulled the other way, at least as long as it dared.

The explanation was that financial deregulation directly threatened the Federal Reserve's own power. It undermined the central bank's ability to deliver on its most basic obligation--to control the overall expansion of credit. The Fed's deepest institutional purpose was to serve as the economy's governor, the wise regulator who kept things from getting out of control. Yet Volcker and other Fed officials doubted that the banking system would do this for itself. The marketplace, they feared, would not moderate the pace of new lending simply by raising the price.

Without supply controls, price was the Fed's only lever. But if borrowers were willing to pay the gong rates, however punishing, what was to stop private debt from expanding indefinitely--beyond control of the Fed, perhaps far beyond any reasonable expectation that the new loans could be paid back? Deregulation gave more freedom to the decisions in the private marketplace, but the Federal Reserve was still responsible for maintaining order. If private debt burdens became swollen and widespread failures resulted, the excesses would be attributed to the reckless lenders and borrowers who had made the unsustainable commitments. But the Federal Reserve itself would also be accused of dereliction of duty.

Thursday, July 22, 2010

A Few Reasons Why This #Depression Will Be Even Greater

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Click here if you prefer the original post on The Daily Reckoning
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By Bill Bonner
for The Daily Reckoning

07/22/10 Vancouver, British Columbia – “This is the Greater Depression…and it’s going to be worse…far worse…than the Depression of the ’30s,” said Doug Casey.

“We’re just in the eye of the hurricane now. It seems calm. But the other side of the storm is going to hit soon. And it’s going to be much worse…”

Doug proceeded to list all the reasons this storm will cause more devastation than the ’30s tempest.

For one thing, people have much more debt. There was relatively little consumer debt in the ’20s. Credit cards hadn’t been invented yet. And if you wanted to buy something from a store you had to pay for it in advance. They had ‘lay-away’ plans. You could pay a little each month. Then, when you’d finished paying for it, they’d give you the merchandise. Generally, people still believed in saving money.

Other reasons:

There was no expensive social-welfare establishment.

There were few bailouts and few boondoggles.

The US government had little debt and was relatively little-involved in the economy.

The US had a positive trade balance.

The US was still a growing, dynamic economy…and the world’s leading exporter.

And the US wasn’t involved in any foreign wars. Its military expenses were trivial compared to those of today.

People wanted to invest in the US. The US dollar was backed by gold.

“Now, smart Americans are getting their money out of the US,” said Doug. “This time it’s going to be much worse.”

Bill Bonner
for The Daily Reckoning

Greg

Wednesday, July 21, 2010

“IN” THE FINAL THREE & ONE-HALF YEARS:

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This particular post is from Ronald Weinland's personal website

Find much more including Ronald Weinland's free book '2008 - God's final witness' at the-end.com
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Ronald Weinland

March 6, 2009

As regular readers/listeners are aware, on December 14, 2008, the world entered the final 3 1/2 years spoken of throughout prophecy as the end-time of man’s rule on earth. On Pentecost of 2012, the world will experience a final transition from mankind ruling himself to that of God’s government ruling over all nations.

Much of the world of traditional Christianity, and even God’s Church, have long believed that this final time would begin with great destructive events that would immediately lead to the death of tens of thousands of people and then continue to escalate throughout the final 3 1/2 years. This period of time has often been referred to as “the great tribulation,” although the Bible makes no such statement regarding this final 3 1/2 years.

The reality is that the Seventh Seal of Revelation was opened on November 14, 2008, and then 30 days later the First Trumpet sounded. This trumpet is prophetic in nature, yet it will also prove to be very physical in its complete fulfillment. It is prophetic in that it reveals the kind of literal, physical destructiveness that will follow in the fulfillment of the six trumpets that are yet to sound.

We now find ourselves three months into that final 3 1/2 year period of time, but thank God that these massive powers of end-time destruction have not yet been unleashed. The kind of suffering that will finally come to pass is horrific beyond comprehension. God is being merciful by temporarily holding back the day when the Second Trumpet sounds and massive physical destruction begins. As always, it needs to be understood that God is not bringing that destruction upon mankind, but mankind is bringing it upon himself (it will be caused by man). God is now holding back that time of massive physical destruction by not allowing man to start this process for a few more months.

This “holding back” is in large part due to the result of God answering the prayers of His people who set aside a time of fasting, similar to that of Esther, whose results are remembered to this day in what is called the Feast of Purim.

On January 31, the Church of God entered a prolonged fast (a fast that lasts beyond the normal one day), and God’s people petitioned God, humbling themselves in the process, seeking that God would humble more people, and thereby deliver many more than He initially revealed would be saved. This is all the result of God’s will and His purpose that is being worked out for this world, and although God has granted to offer mercy to more people in this end-time by bringing more to humility, the choice of repentance is still in the hands of those whom God humbles and grants mercy. It is sad that there will be many who will still refuse God’s mercy and His offer to save them physically through this final end-time.

The petitions that went up before God were not for the purpose that the destructive power be lessened (as this cannot be changed), but that the period of time of the actual physical suffering from it will be lessened, and that through this very process more people will potentially be able to be saved (who can indeed live on into the millennial period that is rapidly approaching). This not only includes the possibility of many more people of different nations being saved, but it also includes an offer of saving many more who were part of the scattering in the Church after the apostasy in 1994 (who otherwise would not have been given such opportunity and blessing).

Mocking continues:
Sadly, the world, and even the Church that was scattered, is unaware that God’s Church fasted for them and has been praying for them. God is answering those prayers by extending the time before the Second Trumpet sounds and actual massive physical destruction begins in the United States. With this change of timing for the Second Trumpet and with the change of timing that occurred in the revelation of the “50 Truth” to God’s people, all others who are without this knowledge or that are unbelieving of such matters often turn to mocking that which they do not see.

We understand the inability of people to “see” what God is doing during the timing of this First Trumpet, so we recognize the need to endure more ridicule and skepticism for a longer period of time. It really doesn’t matter that people don’t yet accept what is true, but what is important is that more of them can be saved through what is coming. Those who are saved through all this will one day be very thankful to God and to His Church for what they did on their behalf.

Foolishly there are those who are quick to find fault by saying we are wrong or that I am a false prophet since physical destruction did not come at a time I had previously stated. It is easy to see, that without the understanding of “why” some matters of timing have changed, that some would doubt or ridicule what is true. Yet the time for the final 3 1/2 years has not changed at all. We are in it! We are in the countdown before the actual day Jesus Christ returns to this earth as King of kings. There are those who unwittingly and ignorantly seem to wish that destruction was already occurring and that great suffering was already here. But that will come soon enough!

Many do not “get it” concerning the title of the last book that was published. It is 2008 – God’s Final Witness. That was the final and the last year for a witness to be given to mankind at the end of 6,000 years of man’s self-rule. At the end of 2008, the final 3 1/2 years commenced. Mankind has already received his last warning and it was God’s final witness.

Before the Second Trumpet is blown, God is giving more time for people to be humbled before actual physical destruction begins on a massive scale (whereby more can be saved). Rather than physical destruction beginning immediately, more people can actually be brought to humility through the prolonged process we are now experiencing, which will then be followed by massive physical destruction. This extension of time for the duration of the First Trumpet will help bring about more humbling through a process of people experiencing more fully the steady destruction of our economic system. It is where people have placed their trust rather than in God and obedience to His ways.

It’s the economy, stupid!
The quote, “It’s the economy, stupid!” has been repeated much in recent years. When the economy is down, it does get the attention of people. This is the very tool God is now using at the beginning of this 3 1/2 year period that will help begin to humble people and prepare many more for greater humbling once the Second Trumpet has blown.

Governments and corporations have practiced wrong economic principles that are responsible for breeding and providing fuel to greed, misuse of power, and the selfish use of wealth. The leader of this has been the United States. The very process of how the government has established the U.S. Dollar, the Federal Reserve System, the Federal Reserve Bank, Central and Commercial Banks, the Treasury, the IRS, Treasury Bills, with all its convoluted and intertwined workings that has established this entire worldwide economic system, is now falling apart.

Today’s predominating and sustaining financial system that the global economy has been woven from originated in the United States and it is now coming unraveled! There is no mending that will save it. It is doomed to complete destruction. That is prophetic and the truth of it is from God. Such a system cannot stand because it is against the laws of God. Yet the world has established itself upon this false Babylonish System, whether they know it or not. Initially, some nations believed they were immune from what has been happening in the collapsing global economy originating out of the United States, but they are quickly learning that they are very deeply tied into it. They are now finding just how attached they really are. Through time, they have become part of the same Babylonish System.

The pride of mankind is strong. Although the process of collapse has begun, people do not yet grasp how severe this is. As more is taken away, people will be humbled more. Even now, we are witnessing a growing loss of faith that people have in the economic system, banking, wall street, corporations, unions, investor consultants and so called financial experts, and in the very government they believed would intervene to save them. There is no system, no government, no person, no plan, nor anything or anyone but God who can now save people from what is happening in this world.

This first phase of destruction is one that hurts people financially and affects every facet of personal life, from food, clothing, housing, transportation, livelihood, etc. It is all encompassing in the daily lives of millions. The collapsing financial system of this world is only the beginning of a humbling process for mankind. This is why there are Seven Thunders that will continue to sound and increase in power and frequency. This is why there are Seven Trumpets to be blown. It takes much to humble the nature of mankind!

We are witnessing the collapse of the United States, followed by the complete collapse of all governments of mankind. It has already begun. Nothing can change the course of what is happening. The merchants of the earth are beginning to mourn for what they see collapsing before them.

The Prophetic Sixth Seal:
The prophecies concerning the further fulfillment of what is pictured through the events of 9/11 are well under way, but the world and the Church that was scattered are fully asleep to this truth. The prophetic Sixth Seal that manifests the destruction of 9/11 is beginning to be fulfilled now that the Seventh Seal has been opened and the First Trumpet has already been blown.

The prophetic destruction manifested in 9/11 was followed by a temporary shut down of Wall Street and the plunging of the Dow. It truly takes a lot to humble people, for how soon we all forget. People were shocked and horrified by those events that shook the economic world. Before 9/11 the Dow had been fluctuating between the 10,000 and 11,000 level.

Following 9/11, the Dow plunged in October of 2001 to 7,300. Over the years to follow, it continued to climb until it hit a high of 14,164 in October of 2007. Since that time, the Dow has steadily declined and has now surpassed the plummet that followed 9/11. This is indeed a time for humbling people as they see their hopes and faith for increased wealth diminished exceedingly, far below expectations.

God has taken away the blessing of wealth that He gave to the U.S. It was God who made the U.S. great. “We the people” did not make it great. Wealth and prosperity is steadily being stripped away, and this will continue until everything has been fully diminished. All of this is part of the power to humble in order to save.

Greg

Harry S. Dent on the #market

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One of my favorite guys offers his views on the market
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Greg

Tuesday, July 20, 2010

TIME, TIMES, AND HALF A TIME

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This particular post is from Ronald Weinland's personal website

Find much more including Ronald Weinland's free book 'The Prophesied End-Time Revealed' at the-end.com
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Ronald Weinland

June 20, 2009

As I begin writing this post, I must say that I stand in awe of God more and more as I see this final phase of this end-time continue to unfold. That which we are experiencing is indeed different than what the Church had once supposed it would, in what was referred to as “the great tribulation.” Because of this, I had even believed that this period of time would begin immediately with great physical destruction.

That destruction is coming, and it will be coming all too soon. It doesn’t need to be rushed! Because of the time that has now been lengthened for the humbling process of the scattered nations of Israel, which will result in more people being saved, many are going to experience increasingly difficult financial trials as companies continue to let go of larger numbers of employees, cut back on salaries and benefits, and reduce the hours people are allowed to work. Although such trials will prove to be difficult, they are meager and nothing compared to the conditions we would now be living through if great destruction had already come by now. We can be ever so thankful that the Second Trumpet has not yet sounded and that it may now be withheld even longer.

For the final sermon on the Last Great Day of the Feast, it is planned that a sermon will be given on the subject of “time, times, and half a time.” God is beginning to give a clearer understanding of what He is doing concerning a “new” significance this expression has for this end-time. Due to the special fast held by God’s Church in January this year, some prophetic events have been shifted within the framework of the fulfillment of “time, times, and half a time.”

ideaCity:
A little over a week ago (on Thursday morning) I had interviews with two stations in Toronto, as presenters for ideaCity are being interviewed in the city’s anticipation of this special tenth anniversary event. This is the beginning of a new phase of recognition of God’s two witnesses (although it is only very slight at this time). It is indeed a unique and welcomed experience. Rather than being treated with attitudes that can be challenging, confrontational, disbelieving, irreverent, and at times condescending, there indeed seems to be a shift beginning to take place in which the message (and messenger) are beginning to be treated with greater respect. Of course the other attitudes will always exist, but as God begins to work with larger numbers of people, through a process of drawing them closer to the truth, His message (and messengers) will begin to be treated with greater sobriety and genuine respect.

This is the natural sequence of a change in attitude that comes through the way God works with people to draw them to Himself. Attitudes do begin to change as this same process helps humble human nature and begins to open the ability to “see” the truth and the hope of a new future. God is right now working with millions of people who are going to be called by Him at various stages over the next couple of years. Although they have not yet been specifically called (their minds “fully” opened to the truth), God is still working them and has begun the process of preparing them for that calling.

It will be interesting to see what door or doors God opens as a result of this unique speaking invitation in Toronto. I am reminded of the kinds of invitations Mr. Armstrong received that led to even greater opportunities to preach the gospel (as this was his commission).

On this Sabbath in Toronto, I will interrupt the current sermon series by giving a special sermon focusing on the events at ideaCity and where we are in a sequence of events that involve the Thunders and First Trumpet through which we are still living.

The Honeymoon is ending:
We are living through extraordinary times. We now live at a time when God has completely removed His protection, favor, help and blessings from all the scattered modern-day nations of Israel and from the Church that was scattered, except for His one true remnant group that fully consists of His Church today.

Beginning in 2009, the United States placed a new government in motion that no longer has any favor and will no longer receive any help from God. Over the past decades and even centuries, God has sustained the many governments of the scattered nations of Israel, due to Him fulfilling His promises of physical prosperity and greatness He was to give, especially to the tribe of Joseph (both Ephraim and Manasseh). Those nations of scattered Israel include the U.S., Israel itself (who is Judah), the U.K. Canada, Australia, New Zealand, France, Switzerland, Luxembourg, Belgium, the Netherlands, Denmark, Ireland, Finland, Norway, Iceland, and Sweden. These nations have not only had the favor of greatness and prosperity now taken completely away from them, but these same nations are the first in the world to face prophetic demise. That demise began with the First Trumpet blast of the Seventh Seal that sounded on December 14, 2008.

The demise of the U.S. began on that date, and the removal of God’s favor over the nation is epitomized by the overwhelming response of the country to its new president. There has never been a time in U.S. history where such large masses of people have so strongly believed that a man could be their governing savior. This spirit of jubilation and excitement shown to such a leader has been like a mesmerizing stupor that has taken over individuals’ ability to see the reality that no man has such power.

The United States (Manasseh) was the last recipient of the blessings promised Israel as God made the U.S. the single greatest power and wealthiest nation the world has ever seen. But the U.S. is the first that is prophesied to fall and will lead to the collapse of the remaining nations of Israel as well.

Once God removed His sustaining power from the modern-day nations of Israel (and primarily the U.S.), those governments could no longer be recognized as having any legitimate rule. Only the monarchy of England has any continuing role of legitimacy until Jesus Christ returns.

God is no longer helping to sustain the greatness of the United States. Is it any wonder that we now see some eyes beginning to open and the euphoria of the honeymoon rapidly dissipating? Words like fascism, Marxism, Leninism, socialism, and totalitarianism are being bantered about more openly and convincingly. The kind of democracy the United States has been known by for over 200 years has now passed. Irreversible forces have already been set in motion that will now cause the final demise.

The government and economy of the United States is very near the point of a vacuum collapse where the entire system is going to crush in on itself. All efforts to shore up imploding corporations through government intervention or positive talk on Wall Street are not only going to fail, but these are going to fuel the final catastrophic events that lead to the downfall of the U.S. as a world power. Nations are scurrying to find other means for survival rather than depending on the stability of the U.S. or its currency as they have in the past. China is rapidly and wisely (from their vantage point) dumping U.S. dollars for raw materials all over the world. They no longer want U.S. dollars because they see “the handwriting on the wall.”

I would recommend that people reread the latter part of the post of March 6, beginning with the section “It’s the economy, stupid!” The hopes and dreams that many in the U.S. have over government intervention and the glimmer of a rising stock market are about to be dashed. Such misplaced hope and trust in government and a recovering economy is part of a prophetic fulfillment that is following the First Trumpet blast. All such hope and faith is soon going to be shattered and this plays a major role in the humbling process of the nation.

Greg

Sunday, July 18, 2010

Get the TRUTH about Housing!

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"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--Walt Howard, commenting about CHS on another blog.

Great insight on the REAL housing market situation with supporting charts! From someone *I* consider a valued friend...

On Charles Huge Smith's Of Two Minds blog

Greg

Friday, July 16, 2010

REAL #HOPE & #CHANGE Yes we can!

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There are many things we can do to fight back against government interference with and manipulation of our lives... And the cool thing, to me anyway, is that none of them are illegal or violent.

If enough of us, Americans, truly want to change once and for all the way things operate in the United States we can do so... Yes we can!

I'll lay out a few ideas on how this can be done in a moment...

However, as *I* see it anyway, even though we have the internet, which is great, we still are not communicating very well... We're too fragmented. I may get 10 people to read this post, maybe 15 or 20, 35 on a really good day lol It's not that I want to be a world famous blogger...

It's that I KNOW if we could somehow figure out a way for MILLIONS of Americans to take action at the same time we could correct our government, our politicians, our markets and our economy... When you look over these 'ideas' try to imagine what would happen if the entire Tea Party tried to effect just a few of them... Millions of people, 20 to 30% of the population...

That takes better communication and coordination, actual planning and execution of goals. There truly is power in numbers...

My only 'desire' is to fix things the way they are supposed to be... The United States should stand for freedom, justice, liberty and 'fair' representation in Washington. REAL people, not life long political idiots... Not governmental and financial elites... As I'm fond of saying, even anarchy (The term anarchism derives from the Greek ἄναρχος, anarchos, meaning "without rulers") may be better than that... Better than tyranny and oppression by a tiny group of elites.

Anyway... on to a few of *my* legal, nonviolent ideas that, in my opinion, would change the face of this nation for the better, flush out the corruption and manipulation and put the power back into the hands of the people, which is where it should have been all along...

I think #1 on my list would be to end governmental and federal reserve interference and manipulation of our economy and markets. End the blatant FRAUD.

STOP borrowing! The main cause of our current economic problems is debt / credit! The only solution the government and ?FED have for the problem is to once AGAIN ramp up lending and borrowing! It's the stupidest thing I've ever heard... Stay on track. Reduce your debt, don't add to it...

IF you ALREADY borrowed TOO MUCH! Then file for, chapter 7 ONLY, bankruptcy! You can TAKE BACK all of your money from the banks and whoever else you OWE it to! Your CREDIT will suck but at this point who cares?! Obviously you probably shouldn't have had CREDIT in the first place... Lord...

If 'they' try to tell you that you only QUALIFY for chapter 11 BANKRUPTCY then... CHARGE SOME MORE! Go get yourself a NEW CAR, you can KEEP it after the BANKRUPTCY. Buy a new 60" plasma 3D HD TV! Put a freaking POOL in the backyard! Wait 12 months and talk to your LAWYER again...

Chapter 7 ONLY! Screw the banks I say...

Nobody is in the market anymore anyway, except the 'manipulators', so we can scratch that one... Thanks, in part, to the May 6 'flash crash' whatever TF that means...

IF you are finding it difficult to FEED your family then STOP paying some bills! Preferably 30% INTEREST rate credit card bills... Walk away from your mortgage if you have to... Your FAMILY is worth it. Take care of yourself and your family FIRST!

Please see information about effects on your CREDIT SCORE in the BANKRUPTCY section.

Stop spending as much as possible... Purchases, for now, should be needs based, not wants based...

Limit your purchases with plastic and OF plastic! The electronics industry operates in the reverse of supply and demand laws/rules! The electronics industry is the OPPOSITE of supply and demand! And *I*, king of conspiracy, have figured out why that is... (It has bothered me for a long time lol). The more people who WANT (ie; envy, lust after) an electronic product, LCD HD TV, iPhone 4 (lol), the CHEAPER it becomes. Try that with GOLD lol

It's because the 'supply' side is limitless... They are only selling you chunks of plastic in various 'shapes' with various electronic circuitry attached... Americans spend BILLIONS of dollars a year on PLASTIC that can simply be melted and 'shaped' into anything you want. The electronics industry is an economic bastard, it has no father... it's all merely a trick to sell you TONS of cheap plastic and cheap electronics...

Become a 'shopper' NOT a 'consumer'... We, each and every one of us, control the prices of the products and services we buy. When/if we REFUSE to pay INFLATED prices the prices WILL come down. It's called 'deflation', maybe you have heard of it... It does NOT deserve the bad reputation it has, in my opinion...

This economic 'environment' is becoming ever more 'competitive' right now because they ALL want more of YOUR MONEY. Make them work for it like you have to... Shop for quality and price, it's not that hard to do... Never forget 'they' want 'your' money... Force them to work for it with quality products & services at great prices with great customer service. That's how 'they' are SUPPOSED to be/act. If someone refuses to play then screw them, you don't need them, they need you... Call businesses on bullsh*t, let them know you are watching what they do and are not going to put up with price manipulations or any of their dirty tricks (there are MANY that they employ, rebates that never pay, complexity to separate them from you, etc...).

Get educated! The internet may be the single most amazing thing that mankind has EVER created! It's NOT only a 'porn' portal or 'game' portal... Work on your 'mind', be active, do your very best to be an educated, freedom loving American... And VOTE! Throw the 'bums' out, as they used to say... Bring some integrity and honesty back to Washington. Don't be 'distracted' by 'issues'. Be they abortion or race, libertarianism or religious dogma, health care or immigration... They are all nothing more than government engineered 'wedge issues' designed to divide the population of our great nation along ideological lines. Our government WANTS us to be 'distracted' and 'divided' while they pursue their backroom 'deals' with bribery and threats...

Learn to take care of yourself... Don't be 'dependent' on government for anything... government may not always be able to provide for you... Have the supplies you need on hand, take up gardening as a fun, healthy hobby. I like cooking too...

If millions of people, individuals, did just some of these things, as they apply to their own life situation, the way America operates would change in a big hurry... The entire oligarchy would collapse...

But how do you possibly get millions of people on the same page to take the same actions?

That, I don't know...

Greg

Thursday, July 15, 2010

Economic Immortality for America

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My mom died in early April of 2008... She had health problems actually for many years prior to her death so while it was no surprise it was still ugly... If you know what I mean. Anyone who has ever had to watch a loved one suffer knows what I mean...

It gave me a good opportunity to focus on health care, along with it's delivery systems, for a number of years. Just basically through osmosis... I was there...

It 'seems' to me that a portion of our health care system is designed to 'extend' suffering as a way to extract ever more money from a patient... Whether that money comes from the government via medicare/medicaid or from a private insurance company or from an individual's life savings. I guess the point is as long as there IS money there, somewhere, we all have access to, likely, the greatest most advanced health care system in the world...

As long as SOMEONE is willing to pay for it...

And, as I demonstrated above, there seems to ALWAYS be someone who is willing to pay...

Even individuals who may be in our country 'illegally' have unlimited access to our health care system even if only through emergency room care... I believe it's 'illegal' for a hospital to even try to determine one's ability to pay for services, God forbid they should try to determine someone's citizenship status...

In this country if an uninsured person suffers a stroke, a heart attack, cancer, or any other major health issue they can, and do, receive all the health care required to... save their life, improve their situation, reduce their suffering, treat their illness... Regardless of their ability to pay. $30,000.00 worth of care, $50,000.00, $100,000.00, $1,000,000.00, it doesn't matter. At least not to the person being treated...

Because if they can't pay someone else will... Of course in the end the people who 'pay' for this care are tax payers, consumers... Through higher taxes, through ever increasing insurance premiums, through ever increasing medical costs/medical inflation...

The government 'pays' for anyone/everyone who cannot pay for their own health care now, prior to the HCR bill that passed... There is no one in this country legal or otherwise who cannot receive all the health care that need for whatever it is that ails them...

Of course we can all see that this is quite an unsustainable situation...

To me it's obviously a 'bubble', and a very large bubble at that...

You know like housing was... Like the stock market was/is... Like banking was/is... Like the auto industry was/is... Like insurance was/is... Like utilities were/are...

That's the real macro economic issue in the United States... Our economy is absolutely FILLED with bubbles fueled by debt/credit and now government spending...

That's why my own contention has been all along, and continues to be, that the ONLY thing that can save us from ourselves is IF true market capitalism principles are allowed to take over and correct the situation for us... We don't have to do a thing except allow our economic system to work in the way in which it was designed to work...

What does that mean? Unfortunately, to me it means simply deflation and depression... However... things are SO bad in the United States that it would be incredibly painful to endure... Perhaps even far more painful than the great depression itself... Because government and the federal reserve, the banking system have been scared to death by the very notion of deflation and depression since at least 2001... So 'they' have done everything they possibly could do to prevent the pain... From keeping interest rates artificially low, to the constant devaluing of our currency masked by stock market gains that never seem to be inflation adjusted anywhere, to government taking a forever larger role in paying for the things that Americans are entitled to as well as many things that Americans are not entitled to, even to the extent of paying for things for people who are not even Americans at all...

Our entire economic system is totally screwed and thus far the ONLY way out that our government seems to see is Japanese style deflation for a decade or so at least... I suppose as long as you have the ability to move money around from one place to another electronically that you can never go broke... The federal reserve has this ability... Just add a few zeros to a banks account and all the sudden, magically, they are re-capitalized... Nice trick...

But here's the problem with this... Maybe our government can't go broke, maybe our banks can't go broke, maybe even our major corporations can't go broke...

But it seems to me that the ONLY entity that is still allowed to go broke is the American citizen...

However... we are seeing some dramatic change there as well... Pretty soon the American citizen may not be allowed to go broke either... Then we would have the near perfect economic system right? The last piece of the puzzle for economic immortality...

As long as we don't allow the [bankrupt themselves] banks to foreclose on homeowners, as long as we extend unemployment benefits as an entitlement, as long as we (government / tax payers) pay for everyone's health care as need, as long as we (government / tax payers) provide food and shelter for those in society who cannot afford it themselves.

I think we are almost there... economic immortality for America... As soon as we (government / tax payers) can improve the lifestyle of the afflicted just a bit more... As soon as maybe we (government / tax payers) can buy TVs and cable and internet access for unfortunate people too.. on top of the food and shelter...

If only it weren't for that stupid MONEY everything might be just fine...

To fix that part, the unsustainable spending part, in my opinion, will take deflation and a good old fashioned depression...

Greg

Saturday, July 10, 2010

Interesting take on #Immigration (Editorial)

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July 9, 2010
In our view: Judge will decide fate of new law

The federal government has now filed a lawsuit against the impending new law in Arizona designed to curb illegal immigration. It seems that the suit is based on the idea that Arizona is being “facially unconstitutional.” That means its new law cannot be enforced with constitutional means.

Our first question is: Who knows? The law has yet to go into effect and thus has not yet been enforced. Is that a presumption of future guilt as far as constitutionality? Seems so to us.

The real agenda, politically, is twofold. The federal government does not want a state to “do its job” that it (the federal government) has, by anyone’s imagination, not been doing. We have federal laws on the books to prevent illegal immigration and identify those here illegally. We don’t need new laws — we just need to enforce the ones we have as a first step.

Second, many consider the Arizona law blatant racism. But that is not alleged in the federal lawsuit. Does that mean the federal government does NOT consider that the Arizona law unconstitutionally violates laws against racial discrimination? Probably, many federal authorities feel that way but are doubtful that they can prove it in a court of law.

Progressives clearly do not like the current federal laws related to illegal immigration. That is fine as a political position on their part, and they should make attempts to change the law. On the other hand, we are a nation of laws and as such they should be enforced and not ignored. When other states establish “sanctuaries” that directly violate existing laws, the federal government should sue them.

The only leg to stand upon is to prove in court that the Arizona law violates existing federal law. If in fact the Arizona law simply “mirrors” current federal statues, then we ask what is illegal about that.

Summarizing, this seems to be a political issue, not a legal or constitutional issue thus far. Political issues should be confined to the politics of the legislature. Legal issues are a matter for courts, or at least should be, in our view.

So, we now will spend untold federal and state tax money on litigation over the new law. A judge will make a decision, and of course, that decision will be appealed up to who knows where. It would be money better spent to put more border patrols and resources in place to reduce the tide of illegal immigration while everyone else sorts out the politics of this issue.

Friday, July 9, 2010

I AM #America -Krista Branch (Weekend thoughts)

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Time to Stand up and be counted people & sheeple alike...

'They' plan to take away our internet access one day in the not too distant future... Will likely kill cell phones also... When faced with war the first thing you would want to do is take down communications networks... DUH! The senate is passing a law to allow government to do pretty much anything it likes in this area... Government constantly uses the cover of law to increase their power and control over American citizens...

We need a plan... We need to be ready for what's to come...
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Greg

Thursday, July 8, 2010

The Rats Are Cornered (#government #FED)

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No doubt one of the best articles *I* have ever read on this particular subject matter...

Click here to read it on ZeroHedge

Welcome to the new paradigm

Greg

Cities in Decline (Ongoing #Neosho Saga)

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These people act like we should give a sh*t that they have f'ed everything up...

* a city that continues to face a financial crisis and now is trying to muster public support for INCREASED taxes!

* “We are not going to recognize most of the savings this (fiscal) year,” the mayor said in a phone interview

* officials on Wednesday night projected will be a $1.05 million shortfall for the next fiscal year

* The mayor outlined the array of options considered by the city, ranging from the property tax to still more staff reductions to liquidating assets to bankruptcy

* “Without that BORROWING (1.3 million), we would already be out of money,” he said during the meeting

I'm sick of hearing all this crap... It's the people who RUN things that have gotten us all in this untenable position to begin with! Thank God Cities, counties and states are REQUIRED to get their finances in order... unlike the federal government...

Click here for the original link or read it in it's entirety below,,,

thanks

Greg
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July 7, 2010
Neosho cuts more positions

By Derek Spellman Globe Staff Writer

NEOSHO, Mo. — The same day the city announced it had shed more jobs, Neosho officials outlined the need for a property tax that they say would spare the city from still deeper budget cuts.

Interim City Manager Harlan Moore on Wednesday announced that the city was reducing its rolls by nine positions, mostly by layoffs, spread among the fire, police, finance, public works and general administration staffs, effective immediately. It is the second round of personnel cuts, including layoffs, in the past 10 months for a city that continues to face a financial crisis and now is trying to muster public support for an August property tax measure.

“We lost a lot of good folks today,” Mayor Richard Davidson said, calling the cuts an “unfortunate consequence of the financial crisis” the city faces.

“I absolutely hate the fact that we had to let people go,” he said.

Moore said two of the nine positions were already vacant.

Higher-level positions that will now be vacant include deputy chiefs in both the police and fire departments. In the Police Department, Deputy Chief John Trimble is retiring effective immediately, Chief Dave McCracken said. Trimble’s position will remain vacant.

In the Fire Department, Chief Greg Hickman will retire at the end of this month. Deputy Chief Mike Eads will become the chief, and Eads’ position will remain vacant, Hickman said.

Savings

Davidson said the latest round of personnel cuts, instituted partly to help balance the budget for the fiscal year that ends Sept. 30, would save the city about $500,000 a year, including salaries and benefits.

“We are not going to recognize most of the savings this (fiscal) year,” the mayor said in a phone interview.

But Davidson also warned that those savings alone would not be enough for the city to weather what officials on Wednesday night projected will be a $1.05 million shortfall for the next fiscal year, even after factoring in the most recent cuts.

“We are over a barrel here, and we have some limited options,” Davidson told a crowd of about two dozen people, including city officials and reporters, at the Lampo Building during the first of a series of public meetings about the city’s financial crisis.

The mayor outlined the array of options considered by the city, ranging from the property tax to still more staff reductions to liquidating assets to bankruptcy, and their respective advantages and disadvantages. Bankruptcy was not a solution, he said.

The city earlier this year forestalled insolvency, at least for another year, when the council agreed to borrow $1.3 million. The mayor on Wednesday warned that the city would face the same predicament in March or April of 2011, barring either a new revenue stream or additional cuts.

“Without that borrowing, we would already be out of money,” he said during the meeting.

Davidson, who was first elected to the City Council in April 2009 and was elected mayor in April of this year, told the crowd that a combination of cost overruns on previous projects, a decline in sales tax revenue because of the recession, previous debt loads assumed by the city, and the depletion of Neosho’s financial reserves had contributed to the city’s financial straits.

Specifics about what would have to be cut from next year’s budget if the property tax fails are still to be determined. During the phone interview, Davidson said the city’s attention in recent months has been concentrated on the latest round of budget cuts. The city also has had to deal with the completion of its regular annual audit as it prepares for another review of its finances by the state auditor.

“We have enough work that needs to be done right now,” he said.

But broadly, Davidson has said the city’s general fund — which pays for city services except water and sewer and the golf course — needs to be shored up. That fund’s primary expenditures are for police and fire protection, he told the crowd Wednesday night.

By the numbers

The city is asking voters on Aug. 3 to raise the city’s property tax ceiling to $1 per $100 of assessed valuation. A $1 levy would generate an estimated $1.15 million a year for the city, and would be assessed on real and personal property starting this year. It would cost the owner of a $100,000 home in Neosho $190 a year.

Independent of the August measure, the city recently received word from the state auditor’s office that the city has the authority to impose a levy up to a ceiling of 42.25 cents per $100 of assessed valuation on real estate only. The city has had that property tax on its books, albeit rolled back to zero, since the late 1990s.

Officials say a 42.25-cent levy would generate about $375,000 — leaving the city with $675,000 in cuts to close next year’s projected shortfall.

One resident on Wednesday night asked Davidson whether the city planned to go ahead and impose a levy of up to 42.25 cents even if the August measure fails.

“That has not been discussed by the council,” Davidson said, although he noted that option was “on the table.”

Cutbacks

Davidson said that speaking only for himself, he would have a “hard time” cutting police and fire services, for example, when the city had the chance to raise some revenue through that property tax.

“That is a very tough dilemma,” he said.

And the city also faces a time crunch. The City Council would have to set the rate of any kind of property tax by Sept. 1 in order to start seeing the revenue in January 2011. Davidson said that renders unfeasible the option of posing the tax issue to voters again in November if it fails in August.

The city started the current fiscal year, which began Oct. 1, by laying off nine people within City Hall, and the streets and parks departments. Four other positions that had been vacant remained so, and a 3.75 percent pay cut for city employees was implemented.

That budget called for a total of 119 full-time employees for the current fiscal year. By January, then-City Manager Jan Blase said the city was down to 117 full-time employees.

Blase was later fired by the City Council. He had previously acknowledged that the general fund had borrowed not only from a state loan earmarked for new airport hangars, but also from funds for water and sewer service, hotel and motel tax revenue, and tax increment financing revenue.

Davidson said it was his understanding that all of the nine positions cut Wednesday were full-time jobs.

Wednesday, July 7, 2010

The Story of Your Enslavement

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I just thought this was somewhat interesting... IMO, more people need to spend some time understanding that 'things' may or may not be what they 'seem' at all...

We all have the God given ability to 'think' for ourselves. For our sake we should all try to do a little bit more of it...
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A Few #Trading thoughts #FX

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Just some thoughts on some of the things that are important to me when trading FX.

A strong desire to not only succeed but also not to lose. It is of utmost importance that you protect your capital at all times for it is merely the 'tool' you use to mine for the resource you are after...

My strategy has been to keep my trading size very very small, almost like demo trading, while making an all out effort to make consistent profits in the forex market... I try to use little to no leverage at all. Once this is achieved, and it's very close now, then i will begin to slowly increase my trade size to use a little leverage.

There is no perfect system out there that will work for everyone... Everyone MUST come up with the proper mix of technical indicators and techniques that fit their own personal trading 'style'. Trading technique is NEVER 'one size fits all'...

When/if things begin to go 'bad' for me (ie; 3 or 4 losses in a row), I reduce my size to the bare minimum until I begin to get direction right once again and then, and only then, begin to increase size once again.

Also it can be very important to know when NOT to trade... I have always fought with a desire to always be in the market trying to do something, make something happen... But there are times when you are better off on the sidelines for sure... in choppy low liquidity markets especially...

Hope this helps someone just a little...

Happy pipping everyone!

Greg

Friday, July 2, 2010

#obama's Small Business #Tax #Cut (examined)

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I am lucky enough, or unfortunate enough, to have a little inside information on one of the obama administration's small business tax cuts...

Specifically the HIRE Act, Hiring Incentives to Restore Employment

Sounds good anyway huh? lol

But... as it turns out this 'so called' tax cut is like so many other 'so called' tax cuts that we get, especially from the democratic party...

It is my own opinion that the democrats, generally speaking, HATE tax cuts...

So the 'trick' is to come up with one, a tax cut, that 'sounds' good but one that is so complex for mom and pop business' to take advantage of, or so meaningless as far as to who actually qualifies for it, that it doesn't really amount to a tax cut at all...

*I* think the HIRE Act falls into this category...

The HIRE Act, supposedly anyway, allows employers to take an exemption on their own 6.2% share of social security tax on wages paid to 'qualifying' employees... Effective for wages paid from March 19, 2010 through December 31, 2010.

(Unfortunately, actual employees are still required to pay their 6.2%... No sense in helping them... They already got their HUGE 13.00 a week tax break which has now expired...)

The thing is, as always, the government uses much complexity to tamp down the enthusiasm over any tax cut...

Let's face it... The majority of small business owner/operators in this country are not rocket scientists... That's not intended to knock them or mock them... Rocket science just usually isn't a prerequisite for small business ownership...

Government often, by design, makes it complex just to figure out who qualifies for tax cuts... Similar to what they did with the mortgage assistance program... That was so narrowly defined and difficult to qualify for that it didn't help hardly anyone at all! Besides the fact that it was just a way to increase bank profits in the end anyway...

Most small business' use a small or large accounting service to deal with the complexities of doing business and paying taxes in the United States... To deal with the IRS and all the government regulations and red tape...

So now lets look a little bit of the language in the this 'small business tax cut'...

(03/29/10) QR5: If an employee laid off in 2009 has been receiving COBRA premium assistance, for which the employer has been taking the COBRA premium assistance credit, and the employer rehires the employee, can the employer take the payroll tax exemption under the HIRE Act for wages paid to the employee?
A-QR5: Yes, if the employee is a qualified employee.


(05/06/10) QR6: Can a qualified employer both apply the payroll tax exemption and claim the work opportunity tax credit (WOTC) for the same employee?
A-QR6: No, an employer may either apply the payroll tax exemption or claim the WOTC for an employee, but not both. An employer that wishes to claim the WOTC for a qualified employee may not apply the payroll tax exemption with respect to any wages paid to that employee from March 19, 2010, through December 31, 2010.


(05/06/10) QR7: If an employer applies the exemption to wages paid to a nonqualified employee, is the employer liable for the amount of employer social security tax on wages previously reported as exempt?
A-QR7: Yes, the employer is liable for the amount of employer social security tax on wages it erroneously reported as exempt, because the exemption is only applicable to wages paid to qualified employees. The employer must file Form 941-X for each prior quarter for which the exemption was erroneously applied.


And as far as who is 'qualified' to receive it...

(06/01/10) QE1: Who are qualified employees?
A-QE1: Qualified employees are individuals who begin employment with a qualified employer after February 3, 2010, and before January 1, 2011, who have been unemployed or employed for 40 hours or less during the 60-day period ending on the date such employment begins, who are not employed by the qualified employer to replace another employee of that employer, unless the other employee separated from employment voluntarily or was terminated for cause, and who are not family members of or related in certain other ways to the employer.

(03/20/10) QE2: Do the qualified employees need to do anything to make it possible for their employer to claim the payroll tax exemption?
A-QE2: Yes, qualified employees must certify by a signed affidavit, under penalties of perjury, that they have not been employed for more than 40 hours during the 60-day period ending on the date they started employment. The IRS plans to issue a model affidavit that can be used for this purpose.

(03/20/10) QE3: Is the 60-day period continuous, and can it span 2009-2010?
A-QE3: The 60-day period must be continuous and can span 2009-2010.

(03/20/10) QE4: Does the payroll tax exemption apply to wages paid to an otherwise qualified employee hired to replace an existing worker whose employment terminated?
A-QE4: The payroll tax exemption does not apply to wages paid to an employee who is hired to replace an existing worker, unless the existing worker terminated employment voluntarily or was terminated for cause.

(03/20/10) QE5: Does the payroll tax exemption apply to wages paid to an employee who was previously laid off and then rehired by the same or a related employer after a 60-day period?
A-QE5: Yes, an employer may apply the payroll tax exemption to wages paid to a rehired employee who is otherwise a qualified employee.

(03/20/10) QE6: If an employer lays an employee off because of lack of work and later, when work picks up, hires a new employee, can the payroll tax exemption apply to wages paid to the new employee?
A-QE6: Yes, if the new employee is a qualified employee (i.e., was employed for less than 40 hours during the prior 60 days).

(03/20/10) QE7: Does the payroll tax exemption apply only if the employer previously laid employees off?
A-QE7: No, the payroll tax exemption can apply to wages paid to any qualified employee.

(03/20/10) QE8: If an employer hires a recent graduate who has been in school for some or all of the 60 days preceding the start of his employment, does the payroll tax exemption apply to wages paid to the employee?
A-QE8: Yes, if the employee is a qualified employee. It is not necessary that the individual was previously employed and has lost his or her job to be a qualified employee.

(05/06/10) QE9: Does the qualified employee have to work a set period of time for the employer to be eligible for the exemption?
A-QE9: No. Application of the payroll tax exemption does not require that a qualified employee be employed for a set number of hours or a set number of weeks.

(05/06/10) QE10: Is there a minimum age for qualified employees? Will high school summer hires and interns be considered eligible employees?
A-QE10: There is no minimum age requirement to be a qualified employee.

(05/06/10) QE11: Some businesses use the services of workers who are employees of a temporary agency. Can the temporary agency claim the payroll tax exemption for its qualified employee working at a client business?
A-QE11: The temporary agency can apply the exemption with respect to wages paid to a qualified employee of the temporary agency. This is determined based on when the employee begins employment with the temporary agency, and not based on when the employee begins work at a client business of the temporary agency.

(05/06/10) QE12: If a client business hires an employee who previously provided services to the business as an employee of a temporary agency, is the client business entitled to apply the payroll tax exemption?
A-QE12: The client business can apply the exemption if the worker is a qualified employee when he or she begins employment with the client as its employee. That is, the worker must not have worked as an employee for any business (including the temporary agency) for more than 40 hours in the 60 days prior to beginning employment with the client business.

(05/06/10) QE13: Can employers create their own affidavit or must they use IRS Form W-11?
A-QE13: Employers can use their own affidavit as long as it includes the same information as IRS Form W-11, Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit, and is signed under penalties of perjury.

(05/06/10) QE14: Must the signed affidavit (e.g., Form W-11) be notarized?
A-QE14: No

(05/06/10) QE15: Should employers send signed employee affidavits, such as Form W-11, to the IRS?
A-QE15: No, the employer does not file or send signed employee affidavits to the IRS. The employer should retain these affidavits with other payroll and income tax records.

(05/06/10) QE16: Can an employer apply the payroll tax exemption even if an employee fails to sign an employee affidavit, such as Form W-11?
A-QE16: No. An employer can only apply the exemption on wages paid to a qualified employee. In order to be a qualified employee, among other requirements, the employee must sign an employee affidavit such as Form W-11.

(05/06/10) QE17: Is there a deadline for the employer to get the signed affidavit from the employee?
A-QE17: Yes, the employer must have the signed affidavit by the time the employer files an employment tax return applying the payroll tax exemption. If the employer obtains the signed affidavit from the qualified employee after wages are paid to the employee, the employer can still apply the payroll tax exemption to determine its liability on these wages. In some cases this may require the filing of a corrected return for a prior quarter.

For example, an employer hires an otherwise qualified employee who begins employment on March 1, 2010 and is paid wages in March. The qualified employee does not provide the signed affidavit until April 15, 2010. The employer can claim the first quarter credit on the second quarter Form 941 for the amount of the exemption with respect to wages paid to the qualified employee from March 19, 2010 through March 31, 2010 and can apply the exemption to wages paid to the qualified employee starting April 1, 2010, despite the fact that the employee did not provide the signed affidavit until April 15, 2010.

In contrast, if the otherwise qualified employee does not provide the signed affidavit until August 1, 2010, the employer may not claim the first quarter credit on the second quarter Form 941 for wages paid to the qualified employee from March 19, 2010, through March 31, 2010, and cannot apply the exemption to wages paid in the second quarter because the employer did not obtain the signed affidavit by the time it filed its second quarter Form 941. Instead, the employer must file a Form 941-X to correct the second quarter of 2010 if it wants to claim the first quarter credit and apply the exemption to the second quarter wages paid to the qualified employee.

(05/06/10) QE18: May Form W-11 (or a similar form containing the same information as the Form W-11) be transmitted electronically and signed by way of electronic signature?
A-QE18: Yes, employers may obtain signed Forms W-11 (or similar forms containing the same information) electronically. The electronic system generating the form must transmit the same information as the Form W-11, must ensure that the information transmitted and received is the information sent, and must document all occasions of user access that result in the transmission.

The electronic transmission must be signed by way of an electronic signature by the employee whose name is on the Form W–11 and the signature must be made under penalties of perjury. The perjury statement must contain the language that appears on the paper Form W–11. The electronic system must inform the employee whose name is on the Form W–11 that the employee must make the declaration contained in the perjury statement and that the declaration is made by signing the Form W–11. The instructions and the language of the perjury statement must immediately follow the employee’s statements and immediately precede the employee’s electronic signature. The electronic signature must be the final entry in the employee’s Form W–11 submission.

The act of the electronic signature must be made by the employee whose name is on the electronic Form W–11, and the signature must also authenticate and verify the submission, by making reasonably certain that the person accessing the system and submitting the form is the employee identified on the Form W-11.

Upon request by the Internal Revenue Service during an examination, the employer must supply a hard copy of the electronic Form W–11, and a statement that, to the best of the employer's knowledge, the electronic Form W–11 was made by the employee whose name is on the form. The hard copy of the electronic Form W-11 must provide exactly the same information as, but need not be a facsimile of, the paper Form W–11.


"Form W–11 and the signature must be made under penalties of perjury" Did you get that part? The word 'perjury' is mentioned SIX times in this one section...

As it turns out this tax cut is much easier for politicians to 'talk' about than it is for small business' to implement...

To qualify every seemingly qualified employee must fill out a form w-11 under penalty of perjury... Though this 'tax cut' applies back to Feb/March of 2010 accountant types haven't been able to even get their hands on the form w-11 until late June because it didn't even exist until then...

Just the additional workload alone on small business owners likely makes it more trouble than it's worth... You have to figure out WHO might be qualified... Their hire date and whether or not you can take the exemption on them...

THEN if they no longer work for the company you are SOMEHOW supposed to track them down to try to get them to fill out and sign the REQUIRED form w-11 under penalty of perjury so YOU can get some of your tax money back, not them. What are small business' supposed to do hire a bunch of private detectives to get right on this?! Lord...

If you happen to be one of the many business' in the economy who hasn't hired anyone at all in 2010 then none of this applies to you... No tax cut for you at all...

All I wanted to say with this post is that this crap (excuse my language) that comes from the government in the form of 'tax assistance for small business' is mainly just a crock... If it's difficult for an accounting firm to figure out how many small business owners are going to be able to take advantage of it on their own? None?

Large corporations with a staff of accountants and attorneys might be able to take advantage of it... My calculations show that it likely amounts to about $1,000.00 in savings, not additional revenue, per employee.

Oligarchy..

Nuff said...

If you would like to read more about the HIRE Act (you must be crazy like me lol) click here to visit the IRS' website...

Greg